New Home Sales Soar to 19-Month High

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Friday, August 2nd, 2013
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In a reasonably positive sign for the building and construction industry in Australia, the number of new homes sold has risen to its highest level in 19 months and its second highest level in more than two years.

On a seasonally adjusted basis, the number of houses and apartments sold throughout the country jumped 3.4 per cent in June to rise above 6,500 for the first time since November 2011 according to the New Home Sales report published by the Housing Industry Association.

New home sales have now risen in eight of the past nine months.

Housing Industry Association chief economist Harley Dale broadly welcomed the results, saying it had been encouraging to observe ‘upward momentum’ on an overall basis as the 2012/13 financial year progressed.

PRIVATE NEW DWELLING SALES AUSTRALIA

He says, however, that the latest numbers – which follow less positive data showing a second month of decline in residential building approvals – further reinforce a diverging trend between strengthening conditions in the detached housing sector and softer conditions in the multi-residential market, especially for medium/high density developments.

Whilst detached house sales rose 7.5 per cent in June, multi-residential sales dropped 17.5 per cent.

“Last financial year was a tale of two halves for new home sales” Dale says, adding that new home sales volumes are still down 27 per cent on long-term averages and any recovery implied by the latest figures and other housing data does not imply sufficient levels of building activity to meet forward housing requirements.

“The first stanza was dominated by weakening detached house sales up against stronger multi-unit sales, the latter marked by an improving detached house segment occurring as the multi-unit market lost momentum,” he says.

In terms of states, Victoria led the way, recording a 19.7 per cent rise in sales (detached housing only) followed by Western Australia (up 7.1 per cent), New South Wales (up 3.9 per cent) and South Australia (up 0.5 per cent).

Detached house sales dropped 11 per cent in Queensland.

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